GEORGIAGEORGIA ENERGYENERGY PROJECTSPROJECTS

PRESENTED BY: Mrs. Natia Turnava GEORGIAN INTERNATIONAL ENERGY CORPORATION Content •Directions of State Energy Policy •Present Situation in Energy

9 Oil Transit 9 Gas Transit and Supply 9 Power Energy •Perspective projects in Hydro & Thermal Power Generation and transmission infrastructure •Conclusion MAIN DIRECTIONS OF STATE ENERGY POLICY

•DIVERSIFICATION of ENERGY CARRIERS (HYDRO AND THERMAL ENERGY)

•DEVELOPMENT OF LOCAL ENERGY SOURCES INCLUDING REHABILITATION AND CONSTRUCTION OF HYDRO AND COAL FIRED POWER PLANTS

•STRENGTHENING REGIONAL COOPERATION AND INCREASING EXPORT POTENTIAL THRUGH RELIABLE TRANSMITION INFRUSTRUCTURE

•RENEWABLE ENERGY DEVELOPMENT OIL PIPELINERostov NETWORK Astrakhan Tikhorest Komsomolsk

Novorossiysk Aktau

Tuapse

Makhachkala Kulevi Groznyy Supsa Samsun

Baku

Ankara Erevan Erzurum Kirkikale

Tabzir

BTC: 50 mln. tons Rasht Ceyhan Midyat WREP (BTS): 8 mln. tons Oil Transit

BTC- Baku-Tbilisi-Ceyhan - 55% utilized, next year 100% forecasted WREP-Western Rout Export Pipeline (Baku-Tbilisi-Supsa) - 80% utilized

30 27

25

20 WREP 15 13 BTC MLN TONS 10 666,3 6,5 5,8 6,2 5 1 000 0 2002 2003 2004 2005 2006 2007 Gas Pipeline NetworkRostov of the Region

NORTH SOUTH: 15bcmAstrakhan (3) AZERBAIJAN : 3 bcm (1) Krasnodar SHAH DENIZ: 20bcm (5)

Novorossiysk

Tuapse Groznyy

Sukhumi

Batumi Tbilisi Samsun

Baku Ankara Erzurum Erevan

Tabzir

Rasht Gas Demand and Suppliers Gas BCM per year Shah Deniz Production Forecasted (Billion CM) 18.0 Consumption 16.0 14.0 12.0 2006 – 1,8 billion cm 10.0 8.0 2007- 1,9 billion cm 6.0 4.0 2.0 0.0

010 012 022 024 032 2006 2008 2 2 2014 2016 2018 2020 2 2 2026 2028 2030 2 SOCAR 2006 10 % 2007

SCP 10 %

SOCAR GASPROM GASPROM 25 % 90% 65% Georgia’s Energy Balance

2006 • Hydro Energy 5,4 billion kWh Import Themral • Thermal Energy 2,2 billion kWh 5% 28% • Export 0,1 billion kWh • Import 0,5 billion kWh

• Consumption 8 billion kWh Hydro • Net Import 0,4 billion kWh 67%

• Import – Russia, Turkey, Azerbaijan, Armenia • Export – Russia, Turkey, Azerbaijan Export-Import Dynamics (1000kWh)

1600

1400

1200

1000

800 EXPORT IMPORT 600

400

200

0 2002 2003 2004 2005 2006 2007

State Budget allocated to support and rehabilitate the energy sector in 2004- 2006 more than 270 mln. USDs which added 335MW additional capacity (Including 205MW hydro power) Existing Electricity Grid

500kV

110kV

330 kV

220kV MAIN EXISTING HPPS AND PERSPECTIVE PROJECTS • AdditionalLarge Installed HPPs Capacity 1300MW until 2012 • Actual Generation 3.4 bln kWh • Growth of Hydro generation by 50%

ENGURI HPP KHUDONI HPP 700MW 1,6bln KW/H VARDNILI HPP 600mln USD LAJANURI HPP NAMAKHVANI HPP 450MW SHAORI HPP 1,5bln KW/H 485mln USD GUMAT HPP DZAVRULA HPP RIONI HPP

Z.A. HPP PARAVANI HPP 80MW 350mln KW/H TPPs & GAS 85mln USD KHRAMI HPP TURBINE

EXISTING N CONSTRUCION MAP OF NEW SMALL & MEDIUM HPPs

Including GIEC’s Small HPP Projects: 30 New Small HPPs •Construction of 7 small HPPs (30MW) Additional Installed Capacity 300 MW •Rehabilitation of existing HPPs (42MW)

CASCADE OF NENSKRA HPPS

SAGLOLO HPP DARIALI HPP ORKHVI HPP ONI HPP MLETA HPP ONI HPP POTI HPP ZONKARI HPP

KVABLA HPP CHUKHCHUKHA HPP MTSIRI HPP NABEGLAVI HPP SHILDA HPP BAKHVI HPP BAKHVI HPP GUBAZEULI HPP CHELTI HPP TSIPNAGVARA HPP HPP TSKNARI HPP SAMSHVILDO HPP KIRNATI HPP HPP ARKHALO HPP HPP ABULI HPP Coal Energy Coal Energy & Power Transmission Lines

Coal Deposits Potential Reserves 405 mln. Tons (Tkibuli, Vale)

Coal Thermal plants construction period: 3-4 years Total Capacity: 1200 MW, Total Generation 8,4 bln kWh Tkibuli: 600MW, 4bln kWh Gardabani: 300MW, 2,2 bln. kWh Vale: 300MW, 2,2 bln. kWh

Relevant transmission line infrastructure to access export markets Grid System Development GEO – AZR 500kV, Length 20km GEO-ARM 400kV, Length 210km GEO-TRK 500kV, Length 330km Duration: 3 years Capacity 1000 MW 500kV

400kV 500kV FUTUREFUTURE ENERGYENERGY BALANCEBALANCE OFOF GEORGIAGEORGIA (2012)(2012)

• Hydro Energy 7bln kWh • Thermal 10 bln kWh Thermal Export • Consumption: 12 bln 29% 29% kWh • Net Export 5 bln kWh Hydro 42%